EU special measures on energy crisis
Next UK PM to be known in hours
Plans for Germany’s energy levy
Credit Suisse now faces legal spat in AsiaComing up…
European ministers will discuss special measures to rein in soaring energy costs, from natural gas price caps to a suspension of power derivatives trading, as the bloc races to respond to the deepening crisis. The Czech Republic, which holds the European Union’s rotating presidency, is set to include those tools on a list of emergency intervention options to be discussed at a meeting of energy ministers on Friday. The intensifying energy crunch in Europe is putting further pressure on the euro after Russia shut off key gas taps, signaling a cold and difficult winter ahead for businesses and households. The governments of Sweden and Finland decided to create emergency backstops to help utilities struggling to trade on power markets, while Austria will cap power prices for households.
Wait Is Over
The UK will finally find out Boris Johnson’s successor as prime minister on today, after a bitter Conservative Party contest between Foreign Secretary Liz Truss and former Chancellor of the Exchequer Rishi Sunak. Truss, 47, is the bookmakers’ odds-on favorite to become the Tories’ fourth leader in just over six years and inherit a dismal economic outlook. The next PM is facing a currency near the lowest in decades, an unprecedented surge in government borrowing costs and record underperformance in domestic stocks. The result is due to be announced at 12:30 p.m. in London. The winner will take power on Tuesday after meeting with Queen Elizabeth II.
Germany’s government expects to receive a large revenue boost by tapping windfall profits generated by energy companies if they keep benefiting from disruptions in Europe’s electricity market, Chancellor Olaf Scholz said. Germany will take in “many, many billions” of euros under the scenario and would use the revenue to help consumers hit by rampant inflation, Scholz said in an interview with broadcaster ZDF. He was also confident that Europe’s biggest economy won’t face power blackouts.
Another Fight for Credit Suisse
Credit Suisse Group’s next legal battle unfolds in Asia as a local subsidiary stands trial in Singapore accused by a billionaire client of negligence he says cost him as much as $800 million. Bidzina Ivanishvili, a Georgian tycoon who was once his country’s prime minister, is expected to testify via video link on the opening day of the trial, which comes just months after his victory in a related clash with the Swiss bank’s Bermuda life insurance unit. The dispute adds to the problems that newly appointed Chief Executive Officer Ulrich Koerner and chairman Axel Lehmann are keen to resolve as the bank reels from reputational hits in the last two years.
Europe’s deepening energy crisis has sent the region’s stock futures and the euro tumbling. OPEC+ meets to set production levels for October after Saudi Arabia flagged the possibility of a reduction. Bank of England policy maker Catherine Mann speaks at a conference. There’s a slew of PMIs from countries including Sweden, Germany and the UK. On the earnings front, it’s a quiet day with US markets closed for Labor Day.
(Source: Bloomberg Sept. 5-2022)